NEWS WIRE: India: ABN Amro to Double Microfinance Activities to $140m

Original article available here.

KOLKATA, June 17 – ABN Amro Bank aims to double its microfinance operations in India at INR 600 crore (USD 140 million) as on March 31, 2009, up from INR 300 crore (USD 70 million) in March last. The bank plans to use the business correspondent model in order to scale up its operations in the rural areas.

“We do not have a significant presence in the rural areas, hence having business correspondents will help achieve the scale,” said Ms Moumita Sen Sarma, Vice-President, Head-Microfinance and Sustainable Development, India, ABN Amro.

The bank is exploring options of a mobile-based technology, which can be used by the business correspondents in order to provide microfinance to the rural customers.

Mobile phones can act as a point of sale device and can serve as a suitable model for microfinance in rural areas, Ms Sarma told Business Line. The bank is in talks with technology providers such as Eko and ClassifEye for the same.

According to Ms Sharma, the bank would conduct a test run on a pilot basis in order to check the security aspects and to ensure that Know-Your-Customer norms are respected. “We will not proceed further until we are confident about the robustness of the technology and are assured that KYC norms can be carried out well on this technology,” she said.

The bank currently lends to 29 microfinance institutions and expects to tie up with about six more MFIs this year.

Through the technical assistance programme, the bank aims to build a network of 42 MFIs in the underserved States of the country by 2010.

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